What is a trust?
A trust is basically an agreement that is made during your lifetime between you (the grantor or trustor) and a trustee, which can be either an individual or an entity such as a bank. The trust agreement determines how the assets placed in the trust will be managed and distributed. There are a variety of reasons that people establish trusts, such as asset management, asset protection or estate tax planning.
What are the different types of trusts?
A common trust is a Revocable Living Trust, which may be used as a "will substitute." It contains provisions regarding asset management and disposition of assets upon death. Another type of trust is a Testamentary Trust, which is a trust funded only upon an individual's death. Another technique is to establish an Irrevocable Life Insurance Trust, which may provide estate tax savings. There are different types of trusts for different purposes and not everyone needs a trust.
What is a Special Needs Trust?
A Special Needs Trust is a trust that is designed to provide funds to the beneficiary in such a way that the beneficiary remains eligible for public assistance programs. Gifts can be made to the trust. It may also be established to hold an inheritance.
Are there trusts that I can set up to give money to charity?
There are two types of trusts that can be set up to help you make charitable contributions. Charitable Lead Trusts allow you to make donations to your favorite charities during your life. When you pass, the remaining money goes to your heirs. More information on Charitable Lead Trusts...
Another type of charitable trust is called a Charitable Remainder Trust. This type of trust allows you to give your heirs a certain amount of your assets per year, with the remainder going to a charitable organization. More information on Charitable Remainder Trusts...
Source: National Academy of Elder Law Attorneys, Inc.